Which of the following statements regarding cost drivers is false?
A) Different businesses can have different sets of cost drivers.
B) Cost drivers should generally be chosen based on a cause-and-effect relationship between the driver and the specific cost being considered.
C) Cost drivers are groups of overhead costs that are similar.
D) An activity could have more than one potential cost driver.

Question

Quizplus · Accepted Answer

Cost drivers are specific activities or factors that cause costs to be incurred, and are not groups of overhead costs that are similar. Option A, B, and D are all true statements about cost drivers.

Which of the Following Statements Regarding Cost Drivers Is False